Tag Archives: bankruptcy

BHP, Vale Samarco JV filed for Brazilian bankruptcy protection | Instant News

FILE PHOTO: Brazilian mining company Vale SA logo seen in Brumadinho, Brazil January 29, 2019. REUTERS / Adriano Machado / File Photo

RIO DE JANEIRO (Reuters) – Samarco Mineracao SA, a joint venture between Brazilian miner Vale SA and BHP Group Ltd, has filed for bankruptcy protection to prevent creditor claims from affecting its operations, Vale said in a securities filing Friday.

The collapse of the dam at the Samarco mining complex in 2015 killed 19 people and severely polluted the Doce River with mining waste, one of Brazil’s worst environmental disasters. The facility, which resumed production in December, was the focus of significant litigation from bondholders with nearly $ 5 billion in debt.

“The filing (judicial reorganization) is needed to prevent ongoing legal action … from affecting Samarco’s ability to produce, send, receive for its exports and to fund normal activities,” the company said.

Vale said the filing for bankruptcy protection would not affect Samarco’s ability to pay compensation to those affected by the 2015 dam explosion. It said negotiations outside the court with creditors had slowly failed over time.

The court reorganization request, filed in the state of Minas Gerais, is roughly similar to the United States’ Chapter 11 bankruptcy filing.

Samarco has $ 4.7 billion in financial debt from unrelated parties, Vale said. In the years following the Samarco disaster, Samarco has negotiated with creditors to reach a restructuring agreement. However, those talks slowed down in 2019 following changes to dam regulations in Brazil, which materially affected operations at Samarco, Vale said.

In 2019, another dam exploded at the Vale mine in Brazil, killing some 270 people and prompting tightening of rules governing mining dams.

Most of the debt is now held by “investors active in distressed asset markets,” rather than original bondholders at the time of the disaster, Vale said.

Reporting by Gram Slattery; Edited by Christian Plumb and Will Dunham


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NRA CEO LaPierre reportedly told travel agent to hide certain stops on his private jet flights | Instant News

A travel consultant who testified in the National Rifle Association bankruptcy case said chief executive Wayne LaPierre asked her to omit certain flight stopovers from invoices she sent to the human rights group. firearms for Mr. LaPierre’s private jet trip, a disclosure that NRA lawyers are disputing. keep out of court record. The travel counselor testified, in a video filing released in bankruptcy court Thursday, that some invoices she sent to the NRA omitted stopovers in Nebraska and the Bahamas, at Mr. LaPierre’s request. Some of Mr. LaPierre’s relatives who frequently traveled on private jets paid for by the NRA live in Nebraska. The NRA chief previously said he travels frequently to the Bahamas to stay for free on a 108-foot yacht in the Bahamas with family members, provided by an NRA vendor, for safety reasons. Testimony that Mr LaPierre sought to hide some private jet stops from the NRA’s own accountants could be evidence that he knew what he was doing was wrong and that he was deliberately hiding it, legal experts have said . “If this is true, it appears to be a clear and documented example of misusing NRA assets and covering up this abuse,” said Elizabeth Kingsley, a Washington nonprofit lawyer. .

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German bankruptcies fall to lowest levels since 1990s | Business | Economic and financial news from a German perspective | DW | Instant News

Number of company bankruptcies in Germany fell last year to the lowest level since 1999, data from the Federal Statistical Office showed.

German district courts reported 15,841 company bankruptcies in 2020, about 15% less than the previous year.

The decline does not paint a true picture of the economic woes inflicted on the economy by the coronavirus as the German government’s decision to allow businesses damaged by the pandemic to postpone filing for bankruptcy during the crisis.

“It’s a paradox: Despite one of Germany’s biggest economic crises last year, bankruptcies were down 15%,” said Ron van het Hof, CEO of Euler Hermes credit insurance in Germany, Austria and Switzerland. “It shows how strongly the trend of bankruptcies is separated from the actual overall economic conditions and the current state of the company.”

The German economy shrank 5% last year, witnessed one of the worst recessions on record as the COVID-19 lockdown brought the economy to a virtual standstill. The country still fared better than other European countries, assisted by massive financial support from the government and strong demand for its goods from China.

Multi-billion aid packages have offered big respects to companies experiencing declining sales. That support comes in the form of tax breaks, salary subsidies, VAT reductions and even purchase of shares in companies such as the Lufthansa airline – measures that have kept many companies afloat.

A temporary pause for debt-ridden German companies

German companies are required to file bankruptcy within weeks if they default on debt obligations and have accumulated enormous debts. However, in March 2020, the government announced a freeze on bankruptcy rules to avoid a wave of bankruptcies following the coronavirus crisis.

Berlin has extended its suspension of bankruptcy filing obligations for debt-ridden companies until April 30 amid the ongoing pandemic. Bankruptcy obligations for insolvent and illiquid companies were reinstated in October.

“Just suspending the obligation to file doesn’t address the real causes of bankruptcy, it just delays the consequences of the crisis,” said Timo Wollmershäuser of the Munich-based ifo Institute.

There was no wave of German bankruptcies

That’s a concern many experts have flagged, arguing that government-supported measures artificially prop up unsustainable companies, so-called zombie companies, that will struggle to meet their debt obligations, regardless of the current economic situation.

Christoph Niering, chair of the Association of Insolvency Administrators of Germany (VID), does not expect the relief measures to be canceled this year, especially with federal elections only months away.

Euler Hermes hopes the aid package can bring bankruptcy rates artificially under control this year. Corporate bankruptcies are likely to increase by only 6% in 2021 and another 15% in 2022, he said on Monday, adding that despite an increase in the number of bankruptcies would only be about 4% higher than pre-pandemic levels.

“Many companies don’t realize that the obligation to file bankruptcy remains suspended only under very specific conditions,” warns Van het Hof. This is a big risk, he said. “We assume that some companies, especially small ones, will actually have to file bankruptcy.”

Renewed and extended locks often leads to a greater financial burden than the requested aid money can bear, he said. Such companies “are in some cases on very thin ice and could unwittingly slip into liability problems.”

For suppliers, he said, this also creates uncertainty. “In some cases, they fly blind because they don’t even know if the customer can actually afford to pay.”

With contributions from the Reuters news agency


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Transport Online – The oil tanker ‘OKYROE’ has a problem in Western Scheldt [+foto] | Instant News

VALUE – Late in the afternoon on Tuesday, a ship ran into trouble at Western Scheldt. It happens at the Value level.

The oil tanker ‘OKYROE’ was sailing from Antwerp (B) towards Vlissingen when it encountered technical problems between Walsoorden andwaarden. The ship with a length of 228 meters and a width of 32 meters was floating. The captain then decided to drop anchor.

Three tugs and a ship from Rijkswaterstaat are now on site. The tugboats have transformed the ship so that it can be safely brought to the port of Everingen a little further in Western Scheldt. A closer inspection will be carried out there.

OKYROE is an oil tanker built in 2004. It sails under the flag of the Marshall Islands. The ship is more than 228 meters long and 32 meters wide.


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Brazil’s Oil Industry Shocks Could Ruin Its Economy | Instant News

Following the dismissal of the CEO of Brazil’s state-controlled oil group Petrobras by President Bolsonaro earlier this week, experts fear greater intervention might be underway in the country’s oil industry.

The removal of CEO, Roberto Castello Blanco, from his position at the head of Petrobras followed a conflict with the President over rising energy prices. Concern that rising diesel prices would lead to protests led Bolsonaro to oppose the Petrobras price hike under Castello Blanco.

President Bolsonaro quickly replaced Castello Blanco with former Defense Minister Joaquim Silva e Luna, who had no previous experience in the industry. However, the outspoken former CEO hit back, warning that state intervention policies could place artificial limits on fuel prices. Castello Blanco explained“If you want to have a market economy, you have to have a market price. The prices below have many consequences, some are predictable and others are unpredictable, but all of them are negative, ”.

The former CEO seemed like it too makes a statement in her wardrobe choices, wearing a t-shirt with the slogan “Mind the Gap”. This reflects the Petrobras 2019 slogan, which refers to its goal of closing performance gaps with leading oil and gas companies around the world. More state intervention is expected to further widen this gap.

Following the change of leadership, Petrobras’ stock plummeted, losing 20 percent of its value Monday, about $ 13 billion. This also had a negative impact on the Brazilian currency, which fell by 2 percent in value.

Related: How High Can Oil Go?

This is not the first time Brazil’s oil industry has struggled with state intervention. Petrobras is on the brink of filing for bankruptcy under former President Dilma Rousseff, easing fuel prices that are wreaking havoc on the industry.

Currently, Brazil pegs its oil prices to international prices, but because the country owns 36.8 percent of shares in Petrobras, and 50.5 of the votes, Bolsonaro holds the card for fuel prices.

Although the president has assured the public that his actions are not the same as ‘interference’, based on previous fuel subsidies by the state, international investors are unsure of the president’s intentions.

With elections set to take place in 2022, Bolsonaro is trying to win public support from major demographics. Reducing fuel costs could significantly affect thousands of truck drivers, who protest against rising fuel costs.

That The President also signaled greater intervention in the energy sector over the next few weeks, this time with a focus on electricity. “If the press is worried about yesterday’s transition [in CEO], next week there will be more, “he said. “We will stop the electricity, which is also a problem”.

However, larger interventions in the energy sector could discourage foreign investment in the country. After being hit badly by the Covid-19 pandemic, this is a worrying prospect for the Brazilian economy.

James Gulbrandsen, head of investment for Latin America at NCH Capital declared moved“If Bolsonaro interferes with the pricing of electricity, it might end his ability to attract foreign capital,”.

Castello Blanco has won national and international support for Petrobras, reduced corporate debt, pushed for greater independence, and made the company attractive to a growing oil market such as India. We are yet to see if Silva e Luna will earn the same respect.

By Felicity Bradstock for Oilprice.com

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